Innovation in long-established, large organizations doesn’t come easy. But with disruption coming for industry after industry, business leaders have to be prepared to take the necessary steps to pivot—and continue pivoting—wisely and rapidly in the ever-developing digital era.
Jeanne Ross, who recently retired from MIT’s Center for Information Systems Research (CISR), spent 27 years studying the challenges faced by senior-level executives at CISR’s nearly 100 global sponsor companies. Informed by that experience and specific transformation research during her last five years with the center, Ross’s most recent book (co-authored with Cynthia Beath and Martin Mocker), Designed for Digital: How to Architect Your Business for Sustained Success, delves into the importance of redesigning the company’s people, processes, and technology to innovate and execute digital strategies.
The Center for the Management of IT (CMIT) at UVA’s McIntire School of Commerce will host a webinar featuring Ross at noon on Wednesday, Nov. 18, when she will discuss her book with CMIT Scholar and IT Professor Stefano Grazioli. Register here.
Grazioli, who also serves as Director of the School’s M.S. in MIT Program, has already incorporated Ross’s book into the graduate program’s curriculum. He says that it resonates well with the program’s pedagogical mission; in fact, her latest book is the third title she has produced being used as a resource for the M.S. in MIT, as it joins Enterprise Architecture as Strategy, and IT Savvy.
“In the rush to adopt cloud, mobile, and analytics, many organizations have lost their ability to develop broad visions that tie together people, processes, data, and technology,” Grazioli says. “Some even criticize the usefulness of developing such visions, citing the unpredictable dynamics of business environments. The M.S. in MIT Program takes the stance that IT leaders need to lead IT, and that means developing high-level designs of the IT used by organizations to conduct their business. Jeanne has dedicated her lifelong research to this goal.”
Drawing on her research and in-depth case studies, Ross’s newest book proposes that leadership return to the drawing board to plan its digital strategy and provides a practical roadmap for integrating their people, processes, and tech to execute on that strategy.
Regarding the upcoming CMIT webinar, Grazioli is curious to discover her views on many topics affecting the philosophies behind technology management, including leadership questions. These include the tensions between “the need for top-down leadership and the vision to effectively run a business, and the recent focus on bottom-up decision making: the decentralization of decisions to product teams, the emphasis on experimentation, and the short-termism that characterizes at least some approaches to the management of technology.”
In advance of the webinar, we spoke with Ross about disruption, digital transformation, and how some businesses have been more successful at pivoting than others.
How did your time at MIT’s CISR shape your approach to helping companies pivot into the digital realm effectively? Which areas or examples of your research ultimately had the greatest effect on your views on the subject?
I started studying digital transformations in 2015, after I completed a set of interviews with CIOs at CISR sponsor companies about their biggest challenges. They consistently mentioned the pressure created by digital technologies. They felt that things like social, mobile, analytics, cloud, internet of things (which I later referred to as SMACIT—smack it) created opportunities and traps. They wanted to lead wise investments and avoid hype, but they also knew their companies had their hands full, in most cases, just trying to do the basic IT services well. They also suspected that startups were a threat, but they weren’t sure of the nature of the threat.
I joined with Martin Mocker, Cynthia Beath, Ina Sebastian, Kate Moloney (all at CISR), and Boston Consulting Group to develop a set of 27 mini case studies of companies that said they were transforming to take advantage of digital. The companies were very early, and most could speak better of their plans than their outcomes, but it provided insights into what companies were trying to do. Two of the 27 companies, Schneider Electric and Philips, provided keen insights into the possibilities and how massive the changes were. Other companies—particularly LEGO, CEMEX, USAA, Kaiser Permanente, BNY Mellon—provided early stories of where things were headed and the role of existing processes, data, and technology.
Throughout those years at CISR, how did disruption itself change? What was different about the ways in which companies were impacted by disruptive technologies early on versus how disruption to industries occurs now?
The main difference is that initially many companies were attempting what we called “digitizing.” That refers to using digital technologies to get better at what you have traditionally done for customers. In particular, many companies were developing apps to provide a friendlier customer interface or using the internet of things to improve operations. We had been arguing for IT-enabled transformation in the early 2000s. With digital technologies, we noted that transformations were not so much IT-enabled as IT/digitally inspired. That turned out to be a huge difference. Business leaders needed to understand what technology made possible as they articulated strategies, and those strategies had to evolve as new possibilities emerged.
In your experience, what are some of the most common barriers businesses face when attempting to innovate?
They tend to rely on organizational structure to define their priorities. Innovation forces companies to rely less on structure and more on empowered problem solvers. They must learn to react quickly to data. They must be designed for learning.
What is a somewhat recent example of successful digital strategy that you’ve seen go really well, and to what do you attribute that success?
Our most recent case is CarMax, which I coauthored with Professor Ryan Nelson. They have excelled at empowering problem solvers and giving them great data to work with.
Conversely, can you talk about a failed attempt to transition into digital and why the attempt fell flat?
GE is the poster child. The company spent $1 billion on developing the industrial internet, only to learn that customers didn’t want what GE was selling. Note that the failure is a point in time. GE is turning this around. They will eventually generate profits on their industrial internet, but they would have invested differently if they understood that digital offerings require changes in the behaviors of customers and that customers have habits that they may be reluctant to change. Thus, digital offerings must be developed with customers and constantly tweaked to make sure somebody is willing to pay for whatever it is you want to sell.
Which industries that have had only minor disruption do you envision still undergoing massive digital tech-induced change in the years to come?
I expect that consumer products goods companies have only begun to see the impacts because, basically, people still want their physical product, so customers haven’t demanded much yet. Also pharma companies are only slowly shifting from traditional R&D to patient-driven R&D and to looking for revenue streams that involve keeping people well rather than treating illnesses. Oil and gas needs to change to survive and that has been a struggle. I doubt any industry will be untouched, and many will be fundamentally reshaped.
